TMX asks Canadian regulators for rules on U.S.-linked pot stocks

By Alastair Sharp
TORONTO — Canada’s TMX Group Ltd is seeking guidance from the country’s securities regulators, it said on Thursday, as it weighs how to deal with marijuana companies listed in Canada with interests in the United States, where the business remains federally illegal.
The move seeks to draw a line under policy uncertainty for investors and companies that pits more liberal rules around cannabis cultivation and distribution in Canada against a Trump administration that has taken a harder line.
While TMX has largely shied away from listing marijuana-related companies with U.S. investments or operations on its own Toronto Stock Exchange (TSX) and other venues, it processes all Canadian equity trades via its clearing house, the Canadian Depository for Securities (CDS).
That means dealing with a string of marijuana companies that have swarmed to the smaller Canadian Securities Exchange (CSE) to raise funds, often to fund U.S. opportunities.

Marijuana grower Canopy Growth Corp. surged to the highest in five months after becoming the first weed producer in North America to graduate to a major exchange.
Shares of Smiths Falls, Ont.-based Canopy, which will take its place on the Toronto Stock Exchange starting Tuesday, jumped 14.5 per cent to close at $3.24 in Toronto — the highest level for Canopy since November. The stock is up 8.8 per cent this year, on track for a third annual advance.

Publicly-traded marijuana companies had a rough week but got a bounce Thursday following news of raids at the Cannabis Culture dispensary chain owned by Marc and Jodie Emery.
The outspoken marijuana activists were arrested at Toronto’s Pearson Airport and a series of Cannabis Culture dispensaries, which are not licensed to sell medical marijuana, were raided in Vancouver, Ottawa and Toronto.

As many as 38 of the 240 companies listed on the S&P/TSX composite index — the preeminent benchmark tracking the performance of Canada’s largest companies — were trading below $5 this week.
In other words, up to 15.8 per cent of this country’s dominant index, an important symbol of the nation’s economic might, would be considered a penny stock on most major U.S. exchanges, according to rules set by the U.S. Securities and Exchange Commission.

TMX Group Ltd. is outperforming its global peers this year as investors see a glimmer of a turnaround at the Canadian exchange operator as it tries to diversify beyond its traditional resource base.
Shares of Toronto-based TMX, which owns and operates the Toronto, Venture and Alpha stock exchanges, along with a securities clearing house and derivatives markets, are up 8.6 per cent this year, outpacing 26 peers in the Bloomberg World Exchanges Index, including London Stock Exchange Group Plc and Nasdaq Inc.

The latest rival to take on the mighty Toronto Stock Exchange is pitching a cheaper road to becoming a public entity with the launch Tuesday of a new service to lure companies to list on the exchange.
But Jos Schmitt, chief executive of Aequitas NEO Exchange Inc., says the upstart — which launched a complementary trading business in March — doesn’t plan to fall into the trap of predecessors who competed with the TSX primarily through lower fees when it came to listing company shares on their exchange.

TORONTO — Brazilian mining giant Vale’s plan to sell a stake in its base metals unit through a Toronto Stock Exchange listing could lead to the biggest IPO in Canadian history and a windfall in fees on Bay Street.

Regulators have approved the creation of an upstart stock exchange and trading platform backed by a consortium of banks and buy-side investors including Royal Bank of Canada and OMERS Capital Markets.
The trading venue, Aequitas, is expected to be go live in March, with the Aequitas NEO Exchange ready to take on listings a couple of months later, says Jos Schmitt, the chief executive of the firm that will compete with TMX Group, owner of the Toronto Stock Exchange.

TORONTO – TMX Group, backed by some of the country’s largest banks and pension funds, is poised to make both small and large acquisitions, the exchange group’s chief executive said Tuesday.
“We are not standing still. We are focused on growth and prepared to act when the opportunity makes sense,” Tom Kloet said, laying out a strategy that includes both organic growth and the acquisition of key assets to “advance” the business.

Canada’s oil and natural gas resources are not the only playgrounds for international energy players: Its financial markets are also emerging as magnets for foreign-based resource companies seeking to raise capital.
The Toronto Stock Exchange and the junior TSX Venture Exchange are collectively home to 35% of the world’s publicly listed oil and gas companies, and 19% of globally listed oil field services companies — the highest concentration of energy listings anywhere.